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Answer 'yes' if you have a contract with the individual, or the individual has asked you to do something as a first step prior to entering into a contract (eg provide a quote).

Answer 'no' if the contract/intended contract is with one person but you need to process someone else's details.

In this context, a contract does not have to be a formal signed document, or even written down, as long as there is an agreement which meets the requirements of contract law. Broadly speaking, this means that the terms have been offered and accepted, you both intend them to be legally binding, and there is an element of exchange (usually an exchange of goods or services for money, but this can be anything of value). However, this is not a full explanation of contract law, and if in doubt you should seek your own legal advice.

If you are processing data of a child under 18, you need to be clear that the child is a party to the contract and not just their parent, and that they have the necessary competence to enter into the contract. If in doubt, seek legal advice.